Does Asia Slump Signal US Bump or Correction? Pros Analyze

U.S. stock futures pointed to a sharply lower opening Thursday morning, following the 7.3 percent sell-off in Japan's Nikkei stock average and soaring 10-year Japanese government bond yields to over 1 percent overnight.

Investors were discouraged by weaker economic data from China, but their top concern was whether the Federal Reserve may start to taper its $85 billion a month bond-buying program sooner than expected.

Wednesday afternoon, the Fed minutes showed that "a number of participants expressed willingness" to scale back asset purchases if U.S. economic data suggested sufficiently strong and sustained growth.

Earlier in the day, Fed Chairman Ben Bernanke talked along the same lines in congressional testimony—saying any near-term decision on scaling back quantitative easing depends on an improvement in jobs data.

A series of leading market analysts and experts appeared on CNBC's "Squawk Box" to read the tea leaves on whether Thursday's global slump is a bump in the road for U.S. stocks or the start of something bigger.

"I think I'd be more likely to be buyer than a seller. First of all, markets correct from time to time. That's natural whether it's in Japan or over here."

"We want the Fed to taper because that means the economy is getting better," Keon added, saying the underlying economy is "stronger than people think" because the fiscal drag of the tax increases and government spending cuts at the beginning of the year should have "pulled us into recession."

"I think we're going to be growing 4 percent-plus," he continued, "as we head into the end of next year into 2015."

"When interest rates rise because the economy is stronger, before you get a big pickup in inflation, that doesn't disrupt the economy and doesn't disrupt the bull market in stocks," he said. "So we are undergoing a correction in a bull market in the context of a long economic expansion that is going to run through the presidential election of 2016. We're not having the next recession in the next several years."

"I've been persistently bullish," added Hoey, saying Bernanke's policies have worked. "The bears have fundamentally been wrong. Not just premature. They've been dead wrong. And we're up 145 percent from the devil's low of 666 [on the S&P 500] in March of 2009, and they're still saying wait until I give you the signal to get in. How useless is that?"

He added, "What you're buying is high-grade stocks, what you're selling [are] speculative stocks because the speculative stocks that were heavily shorted have gone way above where they should be. So it's going to be the spec stocks that'll sell-off."

Michelle Girard, chief economist at RBS:

"Most people probably don't think that the economy is going to be strong enough this year to prompt tapering. I didn't feel like [Bernanke's] refusal to rule out action by Labor Day was in any way a suggestion that they might move before Labor Day. I just think the markets are quite skittish. Nothing I heard yesterday in the Q&A and prepared remarks [from Bernanke] made me think tapering was any closer than thought."

Reading the Fed's Smoke Signals

A number of Fed participants expressed willingness to reduce QE in June, with Greg Ip, The Economist.

"We are still going to plan for an anemic global economy. I think it's a mistake as a CEO to do anything else right now. As we look forward, we're going to assume 2 percent U.S. GDP over the next three years. Europe at about zero. India around 4. China 6 to 7."

"My guess is there is a certain amount of overreaction in the markets," Cote added. "The Fed has been the only adult in the room. And they're the guys who are doing things until we get out fiscal house in order ... [and] that allow us to have the kind of recovery we have had. At some point, government needs to start doing its job."

"The key to this is what's going to happen in the second quarter. We just came off the CEO Council," Nardelli, the former Home Depot and Chrysler chief executive, continued, "there is a little pessimism about earnings in the second quarter."

Greg Ip, U.S. economics editor at The Economist and CNBC Contributor:

"[The Fed] has two exit strategies that they have to handle here. One of them is getting out of continuing to add to their balance sheet. ... The other is when they start moving the short term interest rate up from zero. And there's nothing [Bernanke] said yesterday or in the minutes to suggest that is any less than a year or two away from us."

Robert Doll, chief equity strategist at Nuveen Asset Management:

"Markets don't like transitions. Eventually, it's good news. When the Fed begins to go in the other direction, it means the economy is doing better and we can look at better earnings. But until then, it's all about [price to earnings ratios]. Earnings have basically done nothing for 18 months. And it's all about improvement in PE on the belief that the downside risks are lessening and will eventually get some recovery."

Paulsen: 'Trendless, Sideless Market' in Second Half

A big swing for the markets after mixed signals from the Fed on when the central bank will taper its QE program. James Paulsen, Wells Capital Management, says in the market will digest its gains in the second half of the year. Larry Lindsey, former Fed governor, also shares his thoughts.

"I've been of the view that the market would touch 1,700 [on the S&P] this year ... and we basically got to that level here. And I'm not inclined to raise that target for the rest of the year."

"I kind of think that confidence has been the driving force here for increasing the stock market. I think that people are finally giving up the Armageddon ghost and they're looking at a ... slow but sustainable recovery. That's allowing them to pay up higher multiples."

"The problem I have with the second half for the stock market is I think that it's going to digest its gains because the confidence ... is going to run through the bond market. I think that the hurdle for the stock market is going to be rising bond yields."

Lawrence Lindsey, former Federal Reserve governor:

"I doubt very much that the chairman intended to signal a taper. If you read the testimony, if you listen to what [New York Fed] president Dudley [has] said, it's very clear that the Fed is not going to taper. That it would take extraordinary conditions for that to happen."

"I think what you had yesterday was a miscue on Q&A, which led to the sell-off. I think the problem is here is that the Fed has let the genie out of the bottle. They're promised the markets unlimited liquidity and that is what's driving the markets since QE1."

"Once you let the genie out of the bottle, you can't get him back in," he continued. "So what you better hope for is your three wishes. And they haven't gotten their three wishes yet. I think they're just going to have to continue doing what they are doing and hope and pray that they are actually able to generate a self-sustaining expansion, which we don't have yet."